Question

What is the litigation and settlement process? and why settlements occur?

Answer 1

Around 95% of the lawsuits end up in settlements and only 2% of them end with a jury trial. The settlement rate may vary for different kinds of lawsuits. For instance, more than 90% of the torts end with settlements, while the overall rate for civil cases is approximately 50%.

In terms of the law, a settlement can be defined as the resolution that takes place between the disputing parties and is concerned with a given legal case. The legal case for which settlement is reached might already be in the court, while settlements can also be reached even before a court trial begins. Settlements can provide for one-time cash payments and also for future and periodic payments. In the case of the latter, they are termed as structured settlements.

Below are the important steps of the litigation and settlement process.

The Incident- the malpractice, injury, irresponsible behavior, on any other reason that gives rise to the lawsuit is the incident. This incident is the premise on which one party files the lawsuit against another.

Attorney Selection and Consultation- the concerned parties, including the plaintiff and defendant, are free to consult attorneys and to hire them for presenting their case in the court of law.

Evidence/Fact Gathering- the concerned parties need to gather the evidence and materials that can be put forward as evidence before the judge and can support their opinion or case.

Filing of Complaint- The actual complaint also needs to be filed in the relevant court of law. Sometimes there may be legal and other hurdles that the concerned parties have to overcome. Complaint filing is the actual framework through which litigation begins and proceeds.

Formal Discovery- The next step of legal proceeding is formal discovery, which includes interrogatories or questioning and answering, submission of evidence and facts, and the depositions. A videographer or the court reporter is responsible for the recording the depositions, which may be the questions and answers and the proceedings that go on in the court of law. Deposition of the experts on various subjects relevant to the proceedings and which may help towards judgment are also taken. These witnesses and experts may be hired by any of the sides and can provide expert opinion on medicine, safety, and in other relevant areas. The formal discovery process may last to up to several years as well.

Mediation or Settlement Discussions- Parties may also settle the dispute by themselves and reach to an agreement. A lawyer or retired judge may also mediate between the parties and help them resolve the case so that the parties can reach their desired goals without a trial. But the mediator or neutral party cannot force any decision on any of the parties. The settlement also takes place between the parties before the complaint has been filed.

Trial- When there is no settlement released, the matter will proceed to a trial. A judge or a jury (comprising of up to 12 judges) may be responsible for making the decision. During the trial period, the jury is selected and the parties make their opening statements. Testimony of witnesses, showcasing of the tangible, documentary, and other evidence, closing arguments as well as jury deliberation takes place at this stage. After the judge or jury returns the judgment, any concerned party can appeal.

Appeals- When any of the sides or parties of a dispute is not happy with the decision, it has the liberty to appeal. The decision on an appeal is reached in an appellate court. In the cases of equity, tort, and other kinds of civil matters, any of the parties has the liberty to file an appeal. But in the criminal matters and cases, the prosecution or the state does not have a right to appeal.

Why Do Settlements Occur

Settlement may occur because of many different reasons. A party may not find its case strong enough to be defended in the court of law and therefore try an early settlement. In some cases, there may huge costs involved and the parties would like to escape this cost while getting certain benefits out of the settlement. Apart from costs, stress, time and loss of reputation may also be factors that may call for early settlement and make parties interested in the measure. The settlement has a written document and form. If any party breaches the settlement it not only faces a civil claim for the breach but is also held in the contempt of court. Therefore settlements are legally binding and offer conclusive results for either of the parties.

Also, there is a lot of unpredictability involved with the damages and liability during a trial. When a settlement takes place “out of court”, either of the parties has better and negotiated control over the outcomes and about the financial payments as well. For a settlement, the defendant is not required to admit liability. Therefore, the defendants can escape losing reputation and being recorded publicly in an act of intentional wrongdoing or negligence.